Kimly to raise $40.4m in Singapore's first kopi-o IPO

SINGAPORE - Kimly Ltd launched its initial public offering on Wednesday (March 8) as it gears up to become the first traditional coffee shop operator listed in Singapore.

The IPO, first revealed by The Straits Times last month, is putting forth 173.8 million new shares at 25 cents apiece, with 3.8 million shares available for the public. The deal will put Kimly's market cap size at about S$288.7 million.

The offer will close at 12 noon on March 16, and trading is expected to start on March 20.

With nearly 500 stalls in 64 outlets across the country, Kimly is known to the public as one of the main operators of heartland "kopitiam" offering affordable food and beverage.

In a media briefing on Wednesday (March 8), Kimly executive director Vincent Chia said the business is highly resilient, with strong cash flow from operations and robust earnings growth.

Its revenue has enjoyed a compound annual growth of 7.6 per cent, from 2014's S$148.9 million to S$172.2 million last year.

This led to earnings growth of 9.9 per cent on compound annual rate, to S$24.2 million last year. Cash flow from operating activities has been steady, from S$21.8 million in 2014 to S$28.4 million in 2016.

Mr Chia said the net listing proceeds of S$40.4 million will be used mainly for acquisition and joint ventures, as Kimly continues to eye opportunities to expand its in-house offerings.

Under its food retail division, Kimly runs 121 stalls - part of the nearly 500 at its premises - that sell food under its own brand. These include dim sum, mixed rice and seafood "zi char" stalls. The other stalls are third party tenants, and revenue from their rental and management fees go to the outlet management division.

Aside from potential acquisition, Kimly also plans to expand its central kitchen to double it current output capacity, part the company's efforts to improve productivity.

"We may be kopi-boys, but we're forward thinking kopi-boys," he noted.

The directors intend to reward shareholders with dividend of no less than 50 per cent of its net profit.

This article was first published on March 8, 2016.
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